Philippines Case Study Sulu Sea and East Palawan Basins

Transcription

1 5 th PPM Seminar Petroleum Policy & Management (PPM) Project Coordinating Committee for Geoscience Programmes in East and Southeast Asia (CCOP) July 2006, Bangkok, Thailand Philippines Case Study Sulu Sea and East Palawan Basins Guillermo H. Ansay and Redentor D. Pascual Petroleum Resources Development Division Department of Energy Manila, Philippines OUTLINE Sulu Sea Basins Case Study (background) Project Activities Results of Resource Assessment Results of Economic Analysis Field Development Options Resource Management Strategies Licensing Strategies Recommendations

2 200m Sulu Sea Basins Case Study 1000m 200m REED BANK PANAY 1000m 200m PALAWAN Section Line 1000m SULU SEA 1000m 200m MINDANAO BORNEO

3 Sulu Sea Basins Case Study NW 0 East Palawan Basin Balabac Bancauan Cagayan Ridge Sulu Sea Basin Sandakan Tawi-Tawi SE 4 8 Plio-Pleistocene Middle to Late Miocene Paleocene-Early Miocene East Palawan Basin Sub-basins: basins: Balabac & Bancauan Area: 92,000 sq km Max. sediment fill: 3.5 km Sulu Sea Basin Sub-basin: basin: Sandakan Area: 115,000 sq km Max. sediment fill: 6 km Sulu Sea-East Palawan Basins Case Study Objectives: Address the geological uncertainties of the basins Evaluate the appropriate incentives to attract companies to explore Evaluation of the potential impacts to the Philippines

4 Sulu Sea-East Palawan Basins Case Study Expected Results Resource Assessment Possible Development Options Petroleum Policy Measures Workshops Expert Visits Seminars Meetings Project Activities

5 1 st WS / Mar nd WS / Jan rd WS / Aug th WS / Mar th WS / Mar 2006 WORKSHOPS TOPIC Introduction of the PPM Project, General Overview of the Case Study Basin, Upstream Petroleum Activities in the Philippines, and Resource Assessment Petroleum Prospect & Play Analysis Petroleum Exploration Economics and Economic Modelling Development and Production Solutions Exploration Strategies & Attracting Investments for Exploration in the Frontier Basin Date May Sep 2003 EXPERT VISITS Topic Petroleum Economics and Full- cycle Economic Evaluation Application of Organic Geochemistry to Source Rock Appraisal & Hydrocarbon Characteristics Resource Person/s Dr. Alfred Kjemperud The Bridge Group, Norway Ms. Supaporn Pisutha- Arnond PTTEP, Thailand Jan Sequence Stratigraphic Analysis Nov 2005 Natural Gas Management the role of the Government Mr. Robert Wong Hin Fatt & Mr. Othman Ali Mahmud PETRONAS, Malaysia Dr. Allen Beasly ASCOPE Gas Center 7-10 Feb 2006 Petroleum Reservoir Management the role of the Government Mr. Jan Bygdevoll Norwegian Petroleum Directorate

6 Results of the PPM Project Resource Assessment Resource Class OIL GAS Prospects/ Million bbl Billion cf Sulu Sea Leads (Mean) (Mean) Total resources Discovered Resources 0 0 Undiscovered Resources Hypothetical (Mapped) Resources Speculative (Unmapped) Resources East Palawan Total resources Discovered Resources 0 0 Undiscovered Resources Hypothetical (Mapped) Resources Speculative (Unmapped) Resources

7 Resource Assessment PROSPECT Water Depth (m) Resources (Mean Values) % Risk Oil (MMbbl) Gas (Bcf) SS SS SS SS SS SS PE PE PE Economic Analysis Factors Considered Oil Prices Gas Prices Exchange Rates Inflation Rates Discount Rates NPV

8 Economic Analysis Sulu Sea Basin East Palawan Basin Parameters SS6 Prospect SS2 Prospect SS6 & SS2 Prospects EP1 Prospect Resources 1,733 BCF 1,310 BCF 3,043 BCF 1,719 BCF Production Period 21 years 21 years 21 years 21 years 12% $1,234 MM $731 MM $2,050 MM $1,218 MM IRR 26% 20% 27% 26% Payback 5 years 7 years 5 years 5 years TGT $7,837 MM $5,962 MM $12,523 MM $7,776 MM Field Development Options Palawan Onshore Gas Plant (OGP)) Balabac Island Cagayan de Tawi-tawi Area for Development SULU SEA Floating Production Storage & Off-loading (FPSO) Mindanao Basilan Concrete Gravity Structure (CGS) Sabah Tawi-tawi Sulu Pipelines Onshore Gas Plant (OGP))

9 Marketing Options Source: Natural Gas Office, DOE Marketing Options Oil - locally refined or exported Gas Power generation Transportation Trans ASEAN Gas Pipeline

10 Trans-ASEAN Gas Pipeline Sulu Sea Source: Natural Gas Office, DOE Resource Management Strategies Resources (Oil and Gas) Oil Companies (what kind?) Promotion

11 Oil Companies Company NOC Super Majors Majors Mid cap Small Cap Micro cap Saudi Aramco INOC KPC PDV Lukoil Yukos Source: Norwegian Petroleum Directorate Candidate Oil Companies Already present Buyers of Philippine Data Present in neighbouring countries Past association with the Philippines With interest in similar projects elsewhere Have a strategy & portfolio where a Philippine project would fit in

12 Resource Management Strategies Resources (Oil and Gas) Oil Companies (what kind?) Promotion Promotion Top 10 questions about entering the Sulu Sea-East Palawan Basins (asked by the Board Members) 1. The Sulu Sea- East Palawan Basin, are insane? 2. What will our shareholders think? 3. What s s the potential? 4. How much will it cost? 5. What are the lease terms? 6. Who s s going to work it? 7. Can you get the data, cheaply? 8. We are not going to operate are we? 9. You will get partner and sell down, right? 10. Is it easy to deal with the DOE? Source: Norwegian Petroleum Directorate

13 Licensing Strategies / Contracting Rounds Campaign materials? Where to go? What to do? Recommendations Changes in the Fiscal System (?) - decrease in minimum acreage - increase in % of FPIA Exploration Risk - comprehensive study of frontier basin - encourage acquisition of new data i.e. multi-client surveys due to low amount of existing data Access to Data - liberal access to data by exploration companies - decrease cost of data

14 Philippine Petroleum Fiscal System Contract Area: ,000 sq. km (offshore) 500-7,500 sq. km (onshore) Contract Term: 7 yrs + 3 yrs (exploration) 25 yrs + 15 yrs (production) Signature Bonus: 50, ,000 USD Royalties: None Income Tax: 32% paid out of Gov,t share Cost Oil/Gas:70% of Gross Income Profit Oil/Gas:60% Gov t Share FPIA: up to 7.5% Recommendations Digital Data - conversion of existing data into digital format - easy use and access by companies Progressive Incentives - modify signature bonus according to basin s prospectivity - lower % of SC area relinquishment Promotion - prepare & disseminate promotional materials

15 Recommendations Contracting Round - foster healthy competition among companies - conducted at least every 2 years PNOC-EC / PETRONAS Joint Study - to fully evaluate potential of the basin - advantage: national oil companies in their respective countries - ongoing DANIDA Project in CCOP: made initial steps but with obvious constraints Maraming Salamat Po!